Financial Performance - Total net revenues decreased by 5.2% compared to the same period last year, with wholesale revenue down 6.4% and direct-to-consumer revenue down 3.9%[165]. - Apparel revenue decreased by 3.3%, footwear revenue decreased by 12.0%, and accessories revenue decreased by 2.5%[165]. - Net revenue decreased by 10.3% in North America, while it increased by 6.0% in EMEA, decreased by 5.1% in Asia-Pacific, and increased by 19.7% in Latin America[165]. - Net revenues for the three months ended December 31, 2025, decreased by $73.3 million, or 5.2%, to $1.3 billion compared to $1.4 billion in the same period of 2024[172]. - Net sales for the nine months ended December 31, 2025, decreased by $182.2 million, or 4.7%, to $3.7 billion from $3.9 billion in the same period of 2024[175]. - The company reported a net loss of $430.8 million for the three months ended December 31, 2025, compared to a net income of $1.2 million in the same period of 2024[171]. Cost and Expenses - Gross margin decreased by 310 basis points to 44.4%[165]. - Selling, general and administrative expenses increased by 4.2%[165]. - Selling, general and administrative expenses increased by $26.8 million, or 4.2%, during the three months ended December 31, 2025, compared to the same period in 2024[185]. - Selling, general and administrative expenses as a percentage of net revenues increased to 50.0% during the three months ended December 31, 2025, compared to 45.5% in 2024[185]. - Marketing and advertising costs decreased by $20.2 million or 12.6%, representing 10.5% of net revenues compared to 11.4% in the previous period[1]. - Other costs increased by $47.0 million or 9.8%, rising to 39.5% of net revenues from 34.1%[1]. - Restructuring charges for the three months ended December 31, 2025, amounted to $74.98 million, significantly higher than $13.95 million in the same period of 2024[186]. - Restructuring charges increased by $61.0 million during the three months ended December 31, 2025, a 437.7% increase compared to the same period in 2024[188]. Restructuring and Future Plans - The company approved a restructuring plan with an updated total of up to $255 million in pre-tax charges, including $107 million in cash-related charges and $148 million in non-cash charges[163]. - The restructuring plan is expected to be substantially complete by the end of Fiscal 2026[163]. - Anticipated negative impact of approximately $80 million to cost of goods sold in Fiscal 2026 due to increased tariffs, expected to impact gross profit by approximately 160 basis points[167]. - The company is focused on long-term growth through increased sales in apparel, footwear, and accessories, as well as expansion in direct-to-consumer and wholesale channels[162]. Cash Flow and Liquidity - Cash provided by operating activities increased by $114.2 million for the nine months ended December 31, 2025, driven by changes in working capital[237]. - As of December 31, 2025, the company had approximately $465 million in cash and cash equivalents[225]. - The company anticipates that cash on hand and cash from operations will be adequate to meet liquidity needs for at least the next twelve months[225]. - Cash flows used in investing activities increased by $574.5 million compared to the nine months ended December 31, 2024, with $601.2 million deposited into a restricted investment related to Senior Notes due 2026[238]. - Total capital expenditures for the nine months ended December 31, 2025, were $72.0 million, approximately 2% of net revenues, a decrease of $67.9 million from $139.9 million in the same period of 2024[239]. - Cash flows provided by financing activities increased by $514.9 million compared to the nine months ended December 31, 2024, including the issuance of $400 million of Senior Notes due 2030[240]. Debt and Compliance - The company issued $400 million in Senior Notes due 2030, bearing interest at a fixed rate of 7.25% per annum, payable semi-annually starting January 15, 2026[254]. - The company is required to maintain a consolidated EBITDA to consolidated interest expense ratio of not less than 3.50 to 1.0, and total indebtedness to consolidated EBITDA ratio not exceeding 3.25 to 1.0[248]. - As of December 31, 2025, the company was in compliance with all applicable covenants under the amended credit agreement[248]. - The amended credit agreement provides for $1.1 billion of revolving credit commitments, expiring on June 16, 2030, with certain conditions for extensions[242]. - The company satisfied and discharged the Senior Notes due 2026 by depositing sufficient funds, thus releasing it from remaining obligations under those notes[252]. - As of December 31, 2025, the company had no outstanding amounts under the revolving credit facility after repaying $200 million of borrowings[243].
Under Armour(UAA) - 2026 Q3 - Quarterly Report